Tough legislation is needed in energy consumption

4 june 2014

Analytical Center hosted a Сonference on “Legislative initiatives for strengthening payment discipline among energy consumers”. An annual increase in debt for the consumed energy resources has been recorded for the past years. That is why a number of bills aimed at strengthening consumer payment discipline are being presently reviewed.

“The role of energy in the economy of our country is much higher than in
other countries, that is why the issues encountered in this area, are very
significant and must be treated individually“, said Vladislav Onischenko,
opening the Conference. Participants discussed the initiatives to strengthen
payment discipline among energy consumers.

The Head of the Department of Electric Power Development of the Ministry of
Energy of the Russian Federation Andrey Maksimov said that “We reached a mature
understanding regarding the need to address this issue. The situation in the
wholesale market is almost fixed at the present moment, and only payments in
the retail market remain in the risk zone”. According to him, the level of debt
there is about 150 billion rubles. He considers that the situation needs to be
fixed in regard to the accumulated debt and its constant growth, as the
dynamics of unpaid resources is increasing. “Together with community members we
have developed certain proposals for solving the issues at retail level. Those
proposals were given the form of the package of legislative initiatives, which
is presently being debated”, said Mr. Maksimov.

A draft federal law “On introducing amendments to certain legislative acts
of the Russian Federation related to strengthening payment discipline among
energy consumers” was developed and is presently submitted to the State Duma
(the draft has been adopted in the first reading and is currently being
prepared by the Russian Ministry of Energy to be introduced to the State Duma
for the second reading). A draft federal law “On introducing amendments to the
Housing Code of the Russian Federation and certain legislative acts of the
Russian Federation regarding procedure of rendering housing services and
relations in the area of housing facilities management” (it was submitted to
the State Duma). During the event, experts discussed key provisions of these
draft laws such as: the introduction of financial guarantees for certain energy
consumers, the introduction of subsidiary liability, a more severe
administrative responsibility, increasing the size of penalties for
non-payment. However, the discussion showed that this draft law is not
supported by all. Representatives of regional authorities raise big concerns
and questions in some of the proposed legislative initiatives.

The member of the Council of the Federation Committee for Economic Policy
Viktor Rogotskiy, considers that people are used to not paying for their
services, and this concept is already at the level of public awareness. “If we
do not take serious measures this can slow down the economic development of our
country, - considers he. - We cannot move on without taking drastic
measures”.

Many participants of the event talked about the need for a tough
legislation. The Adviser to the Deputy Minister of Energy of the Russian
Federation Peter Konyushenko, mentioned that debts are not associated with the
lack of money but with illegal actions taken by the citizens. According to him,
Ministry of Energy and Ministry of Internal Affairs of the Russian Federation
have created an interagency working group that has already started working on
non-payments cases. “We must take legislative initiatives to introduce
administrative and criminal liability for offenders”, added Mr.
Konyushenko.

Proposals of the expert community, which were not included in the draft
legislation, were reviewed during the event. They included the possibility to
organize direct payments between suppliers and citizens, introduction of
incentive practices for good payers, a clear identification of
“non-disconnectable” energy consumers, etc.

Director of the noncommercial partnership “Council of Power Producers” Igor
Mironov, said public utilities sector together with “resellers” are in the top
of the debt list. “They owe 70% of the total sum while consuming 60%”,
mentioned he. Mr. Mironov added that the debts are constantly growing and 30%
of them are more than 3 years old. The new measures must improve this
situation.

Conference participants discussed the problem of debt for the consumed
energy from the point of view of energy saving companies, network
administrators, energy producers, government organizations and other
representatives of the industry. Representatives of federal and regional
executive and legislative authorities, producers and consumers of energy,
utility resources and services, professional representatives and experts from
different subjects of the Russian Federation, participated in
discussions.